Insurance and investment group LV= posted a 47% drop in pre-tax profits for the first half of 2014.

But the group, which has call centre operations at Folly Hall Mills in Huddersfield, reported operating profits up 18% to £39m against £33m for the same period last year.

Net earned premiums increased to £1.1bn from £1bn last time.

LV= blamed short-term investment fluctuations for pre-tax profits slumping to £47m from £88m. last time.

Earnings from general insurance were up by 7% to £46m against £43m before.

LV= said group solvency remains strong at £718m.

In life and pensions business, underlying operating profit fell to £7m from £11m, reflecting lower margins on enhanced annuities sales and increased sales of less profitable fixed term annuities. New business contributed £6m compared with £5m last time.

Total life business sales increased by £55m or 9% to £662m.

During the period, LV= was named the UK’s most recommended insurer, according to research by YouGov amongst 30,000 consumers.

It was also the first provider to launch a one-year annuity to help customers affected by the budget – just 10 days after the announcement.

General insurance business continued to diversify into non-motor lines while the group was also number one provider of income protection insurance sold by advisers.

LV= saw renewal rates of 79% and 83% on direct motor and home insurance, while the UK Institute of Customer Satisfaction Index showed LV= to be the leading insurer for customer satisfaction.

Mike Rogers, LV= group chief executive, said the increase in group operating profit was a good achievement in what have been tough trading conditions for both its general insurance and life businesses.

He said: “We’ve seen events affecting both businesses, with continued pressure on motor premium rates impacting general insurance and the Budget affecting our life business, so given this backdrop, we can be pleased with our performance for the year-to-date.”

Commenting on the outlook, Mr Rogers said: “With our mutual model, focus on an excellent level of customer care, and diverse business lines LV= is well placed for continued business growth.

“We expect to see motor rates start to improve to more sustainable levels later in the year and into 2015.

“A degree of uncertainty will remain for our retirement solutions business until more clarity is provided on the new pensions landscape.

“However, we are supportive of the Government’s decision to ensure that guidance offered to all retirees is provided independently as we believe this will help ensure the right consumer outcomes.

“We have a well-recognised, strong brand and we remain financially strong and fit for the future.”

LV= employs 5,800 people and serves more than 5.5m customers with a range of financial products.

The UK’s largest friendly society and a leading financial mutual was founded in 1843.

The organisation was formed in 1843 with the goal of giving financial security to more than just a privileged few. For many decades, the mutual was most commonly associated with providing a method of saving to people of modest means.

Today, it offers its services direct to consumers, as well as through IFAs and brokers and partnerships with other organisations.